JOHANNESBURG (Reuters) -South Africa’s rand slumped on Monday, buffeted by global headwinds including a softer gold price, the sputtering Chinese economy and uncertainty over future U.S. policy after Donald Trump’s election victory.
At 1514 GMT, the rand traded at 17.9375 against the dollar, down about 2% on Friday’s closing level.
The U.S.
dollar last traded about 0.6% firmer against a basket of currencies.
“At the moment, it (the rand) is in a washing machine, being churned around by a weak euro, gold coming lower and lack of guidance on Chinese stimulus,” said Adam Phillips, treasury specialist at Umkhulu Treasury.
The rand has swung wildly since Trump’s election win last week, falling steeply on Wednesday before recovering on Thursday only to sink again on Friday.
Some analysts think that volatility could persist into January when Trump takes over as president.
Potential policy changes from the U.S.
president-elect include tariffs and tax cuts.
Those measures could put upward pressure on U.S. inflation, limiting the Federal Reserve’s scope to ease monetary policy and supporting the greenback.
Later this week the domestic focus will be on third-quarter unemployment numbers, September manufacturing output and September mining production.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed 0.4% down.
The benchmark 2030 government bond was also weaker, with the yield up 5.5 basis points to 9.225%.
(Reporting by Tannur Anders;Editing by Alexander Winning, William Maclean)
